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TARGET MIDVAAL: How the ANC is using the state to target its political opponent

by The Editor

FEATURE: Following the Public Protector’s investigation into the DA-run Midvaal municipality, which found no corruption, President Zuma signed a proclamation authorising the Special Investigations Unit to investigate the exact same charges, except on a grander scale. Midvaal is by some distance the outstanding performer in Gauteng. Why has the President himself deemed it fit for the SIU to investigate Midvaal and not other ANC-run municipalities in Gauteng which, on the exact same criteria Midvaal is being investigated on, fail catastrophically to measure up? The evidence suggests a political agenda. Read on to see the extent of the bias.

TARGET MIDVAAL: How the ANC is using the state to target its political opponent

“The ANC has never been defeated by anybody. This area, this municipality, belongs to the ANC.”Winnie Madikizela-Mandela

1. INTRODUCTION

The purpose of this document is fourfold:

• First, to demonstrate that the African National Congress regards the Democratic Alliance-run Midvaal municipality as illegitimate; that it believes Midvaal should rightly be governed by the ANC; and that until such a situation arises, the party will use all means at its disposal, state or otherwise, to achieve this end.
• Second, in turn, to demonstrate that the Special Investigations Unit investigation into Midvaal -established by proclamation of President Zuma in 2011 – is, by the all-encompassing nature of the terms of reference and the inconsistent manner of its application, politically motivated and part of the ANC’s agenda to discredit Midvaal; that the investigation is a duplication; and that it is unwarranted.
• Third, by setting out a range of comparative evidence and measured against those terms of reference, to demonstrate that numerous ANC-run municipalities in Gauteng are deserving of an SIU investigation; that no such action has ever been initiated against them; and that this constitutes further evidence of a political agenda.
• Fourth, that Midvaal outperforms all other ANC-run municipalities in Gauteng both in relation to those areas of concern highlighted in the terms of reference and above and beyond them; that this is the source of embarrassment to the ANC; and that, with the prospect of the ANC losing power in Gauteng in 2014, this has exacerbated its sustained assault on this municipality.

2. SETTING THE SCENE

2.1. Geography

MAP 1: Gauteng Province

Gauteng Province is divided into three metropolitan municipalities and two district municipalities. The metros are: the City of Johannesburg, the City of Tshwane and Ekurhuleni. The two district municipalities, are: Sedibeng and West Rand. Those two district municipalities are then further subdivided into seven local municipalities. Of those, three fall under the Sedibeng district municipality: Emfuleni, Midvaal and Lesedi local municipalities; and four fall under the West Rand district municipality: Mogale City, Randfontein, Westonaria and Merafong City local municipalities.

TABLE 1: Gauteng Province: Municipalities

[ASIDE: Nokeng tsa Taemane and Kunngwini local municipality were local municipalities in the Metsweding district municipality of Gauteng but, owing to years of financial mismanagement by the ANC-led councils, were dissolved and, along with the Metsweding district, absorbed into the Tshwane metropolitan municipality on 18 May 2011 at the advent of the 2011 local government elections. Merafong City was part of the North West Province until 2009, when it was incorporated into Gauteng.]

For the purposes of this document the primary point of comparison will be between the seven Gauteng local municipalities: Emfuleni, Midvaal, Lesedi, Mogale City, Randfontein, Westonaria and Merafong City.

3. POLITICAL POWER

3.1. The Balance of Power in Gauteng

As of the 2011 local government elections, of the 12 municipalities comprising Gauteng, Midvaal alone is governed by a party other than the African National Congress (ANC): the Democratic Alliance (DA). Every other municipality in the province, from the metros through the district through the local municipalities, is governed by the ANC. The same situation existed prior to the 2006 local government elections (and before that, the DA first won control of Midvaal in 2000).

TABLE 2: Gauteng Local Municipalities: Dominant Party [1]

* Total – All Ballots (Ward + PR + DC 40%)

This situation has been the cause of much distress for the ANC and, in the run-up to the 2011 local government elections, the party put much time and energy behind a concerted campaign to remove the DA from power in Midvaal, in order that it might govern the Gauteng Province unfettered – its metropolitan, district and local municipal councils.

3.2. Unfettered Power

The reason for this attitude is twofold.

On the one hand, ideologically, the ANC believes it governs by right; indeed, by divine right. [2] It simply does not believe opposition to it is legitimate. It sees itself as the one ‘true’ representative of South Africa’s people and thus, any alternative is by its very nature ‘counter revolutionary’ and, in turn, an obstacle to be defeated – not in fair democratic elections but as a duty to the revolutionary ideals it purports to represent. In the ANC’s mind, Midvaal ‘belongs’ to the party, and has been unjustly taken from it.

On the other hand, there are pragmatic reasons for its hostility towards Midvaal. For sometime now, the DA-run municipality has out-performed every other ANC-run local council in Gauteng. As a point of comparison, Midvaal is the source of embarrassment to the ANC and a very real demonstration that its policy and practice leaves much to be desired. The full extent of that unfavourable comparison will be set out later in this document.

This, of course, has served to re-enforce its ideological opposition to the DA-run council. The idea that another political party might govern to a higher standard than the ANC, is to delegitimise its very own worldview: that the ANC alone is capable of best representing the interests of South African citizens.

Importantly, as the DA’s political presence in the province increases, so does the potential threat Midvaal represents for the ANC: a constant reminder that the DA delivers to a better standard when generally compared to other local authorities in Gauteng.

TABLE 3: The DA’s Performance in Recent Local and National Government Elections

As of the 2011 election, that threat is now at an all time high. Come the 2014 national and provincial elections, there is a very real possibility the ANC stands to lose control of the Gauteng Province.

3.3. The ANC’s 2011 Election Campaign

For this reason, the ANC poured a disproportionate amount of its 2011 election resources into its campaign in Midvaal, making every attempt to wrestle from the DA control of the municipality. In doing so, it revealed its ‘revolutionary’ – as opposed to democratic – opposition to the DA’s governance.

ANC stalwart Winnie Madikizela-Mandela would tell ANC supporters in Midvaal, “The ANC has never been defeated by anybody. This area, this municipality, belongs to the ANC.”[3] ANC Deputy President Kgalema Motlanthe would claim the DA in Midvaal didn’t take “our people” seriously.[4] Gauteng Local Government and housing MEC Humphrey Memezi, wearing his ANC Gauteng Deputy Secretary’s hat, said the DA, stood for “Die Again” and that, “if you vote for the DA, you will just be going back instead of going forward because Verwoerd’s apartheid is still in some people’s minds. The youth of 1976 came together and said enough is enough, and it’s time for you residents of Midvaal to form a united front and fight for an end to the DA’s reign in this area.”[5] On another occasion ANC Youth League President Julius Malema would chant: “The president is going to liberate Midvaal from its apartheid shackles,” and “A vote for the DA is a vote for apartheid.”[6]

Unable to contest the debate about service delivery and compromised by its own governance, the ANC would routinely evoke apartheid and the apartheid-style rhetoric when criticising the DA’s governance, implying it served the interests only of whites and that the DA sought deliberately to oppress, ignore and even worsen the circumstance of black Midvaal residents. Indeed, that would be the defining feature of its more general campaign.

When rhetoric would not suffice, the ANC was happy to bend the rules. With a week to go until the election, the Gauteng Premier announced a decision to provide Midvaal with 1 000 potable toilets, implying in a press conference the decision was a response to a lack of delivery on the DA’s part. Delivering the toilets a few days later, MEC Memezi, this time wearing his state hat, accused Midvaal of not providing services for black people, saying it cared only for the white minority in the area.[7] As it so happened, the toilets could only have been provided by the provincial administration and the DA in Midvaal had been requesting them for over a year.[8]

Every means at the ANC’s disposal – party or state – was used to feed and fuel its narrative about the DA. It sent to Midvaal a wide range of its most senior leaders during the course of the election. And inside and outside Midvaal, it propagated the message that a DA government was the worst possible outcome for the people of Midvaal.

When 18 May election results were counted, the DA retained control with an increased majority, winning nine of the 14 wards, even taking a ward off the ANC. The result continued a long term trend in Midvaal: in 2000 the DA won five of what was then nine wards; in 2006, six out of 10 wards. Bemoaning the loss, and despite its viciously hostile campaign, the ANC still managed to play the race card, with one ANC official being quoted as saying: “…our people want to be pushed like wheelbarrows. White people came out in numbers to vote DA.”[9]

ANC spokesperson Jackson Mthembu, in response to the ANC’s defeat, said the ANC were “wonderful losers”.[10] Nothing, however, could be further from the truth.

4. TARGET: MIDVAAL

4.1. The SIU Investigation

Against this background, the ANC-led national government has initiated an in depth, state-led investigation into Midvaal, headed up by the Special Investigating Unit (SIU). The investigation was initiated by a proclamation from President Jacob Zuma – accompanied by a supplementary schedule from the Minister of Justice – and signed into effect on 17 May 2011, the day before the local government elections.

The terms of reference for the investigation are extensive and set out in full in Annexure A, but might be fairly described as so broad as to be all-encompassing. There is, effectively, not a single element of governance in Midvaal into which this full, state-funded interrogation has not commissioned an enquiry.

The allegations, on which basis the investigation was authorised, were already the subject of an investigation by the Public Protector, a fact known to the Presidency at the time. Thus, if anything, the investigation was a duplication. Essentially, a complaint had been laid against the Midvaal administration that it had improperly that comprised the following: that it had improperly secured and retained legal services in relation to specific firm; failed to properly collect certain debts and improperly awarded performance bonuses.[11]

The Public Protector’s Report on the matter (November 2011) – released after the SIU investigation had been mandated – found there was no evidence of corruption, no maladministration in respect of debt collection practices as well as no evidence to support the allegation that the municipality paid performance bonuses irregularly. It did find there were irregularities in the appointment of a legal firm in 2001 but this was corrected in 2006 with a competitive bidding process, which was again repeated in 2009. Where the Public Protector highlighted instances of maladministration in many instances the municipality had already taken remedial action, as far back as 2006. In those cases where further remedial action was required, the municipality undertook do so and the mayor referred the findings in the report to the municipality’s independent audit committee to make recommendations on any further disciplinary action, if warranted.[12]

The Public Protector has, over the last few years, demonstrated a certain amount of autonomy from the national executive, not evident in the past. The Presidency’s decision to duplicate the investigation could arguably represent and attempt to secure a more damning conviction of Midvaal’s administration. To do so, it would widen the net by setting terms of reference as far-reaching as possible.

4.2. The Terms of Reference

The way the terms of reference for the SIU investigation are phrased reveal its unreasonable extent and ill-defined framework. Among other things, it mandates the SIU to investigate any serious maladministration “in connection with the affairs” of the municipality; of establishing whether there was “improper” conduct by “councillors, officials, employees and/or agents of the Municipality”; whether the municipality was responsible for the “negligent” loss of public monies; whether any offences occurred in terms of sweeping sections of the Prevention and Combating of Corrupt Activities Act; whether there has been “improper conduct by any person”, which “has caused or may cause serious harm” to “the interests of the public” which has taken place “between 1 January 2002 and the date of proclamation” related to the issues identified in the accompanying schedule – in other words, over the last ten years.

So broad and ill-defined are the terms as to render the investigation almost farcical from first principles.

What government, whether local, provincial or national, anywhere in the world, has not suffered “improper conduct” by someone connected to it over a ten year period? Or, through the “improper conduct of a person” caused harm to the interests of the public? More to the point, who determines what is “in the public interest” and what, exactly constitutes “improper conduct”? These are all open to interpretation. The general nature of the investigation is to guarantee wrongdoing.

The proclamation, however, goes further.

The accompanying schedule mandates the SIU to investigate “the failure” to “properly implement the Municipality’s Indigent Policy” all the way down to “the failure to record the Municipality’s assets in its asset registers” – a matter, if anything, for the Auditor-General to determine.

Indeed, the accompanying schedule encompasses many of the financial judgements the Auditor-General is required to make in his annual assessment of any local authority’s financial management. The investigation elevates these standard accounting requirements to criteria which, if not met, constitute criminal misconduct.

By that standard hundreds of (ANC-run) municipalities across South Africa should be automatically subjected to criminal investigation, for their annual audit reports make dire reading. Yet none of them have been subject to similar scrutiny.

Midvaal’s record with the Auditor-General is exemplary; and, compared to other municipalities in Gauteng in particular, beyond reproach, as shall be demonstrated.

There can be little doubt, based solely on the nature of the terms of reference, the intention behind the investigation is political. It is worth remembering the ANC government has, for 18 years, fought against a commission of enquiry into the Arms Deal, for which there was, if anything, too much evidence; as well as a deluge of other, hugely significant national scandals. And yet, at the drop of a hat, and amidst a sea of mismanagement and maladministration in Gauteng, it has chosen to interrogate every inch of this particular island of excellence.

In doing so it risks acting counter-acting two Chapter Nine institutions: the Public Protector, which has already tabled findings which address the allegations in question, and the Auditor-General, which has for nine years found Midvaal’s financial management to be sound.

5. THE AUDITOR-GENERAL

As alluded to above, a Chapter Nine institution exists already to investigate on an annual basis, the financial practice of every public administration and institution in South Africa: the Auditor-General.

Given the nature of the terms of reference in the President’s proclamation and the accompanying schedule, it is worth looking at what the Auditor-General has had to say about Midvaal’s financial management and the management of those other municipalities in Gauteng.

Along with Lesedi Municipality, Midvaal in the only Gauteng local authority to receive financially unqualified audit reports from the Auditor-General every year, for each of the last five years. In fact, its record goes back further still – Midvaal has received a financially unqualified audit report for each of the last nine years, which is almost unprecedented.

By contrast, a number of other, ANC-run, local government authorities in Gauteng have not faired as well. Merafong City received three qualified audit reports in the last five years, Randfontein two and a disclaimer of opinion and Mogale City four qualified audits in five years. Each time, they were extensive and substantial. None of them, however, have been subject to an SIU investigation by Presidential Proclamation. Even if one looks outside the local authorities and to the metros, Johannesburg has for the last two years received heavily qualified audit opinions, with substantial and numerous points of qualification – yet there has been no SIU investigation.

But the stand-out counterpoint is Emfuleni Municipality, which has received two disclaimers and three qualified audit reports in the last five years. Indeed, it has failed to yet receive anything better than a qualified audit report from the Auditor-General. Bearing in mind the terms of reference as set out in the accompanying schedule and the fact that the President has never deemed it fit to instigate an SIU investigation into that government, it is worth looking at what the Auditor-General has had to say about Emfuleni, over the past five years.

5.2. Emfuleni: Everything Unaccounted For

TABLE 5: Emfuleni’s Audit Outcomes Record

Emfuleni’s bad auditing run did not start in 2006/07. It stretches further back. It has, in the past ten years, received a total of five disclaimed opinions, four qualified opinions, one adverse opinion and not once a financially unqualified report. Disclaimer and Adverse opinions mean, to quote the Auditor-General, the lack of financial evidence or departure from good practice is “so material and pervasive” or “misleading” the relevant auditor has not been able to formulate an opinion.[14] In short, they are a serious indictment. In each case Emfuleni’s failure to provide a full explanation for its financial affairs was not limited to one or two areas, but widespread and acute. In 2006/07, for example, the Auditor-General cited no less than eight fundamental areas, each in such disarray that he could not even quantify the extent of the problem. By 2007/08 the basis for Emfuleni’s disclaimer had increased to 16 points.

The nature of those particular concerns are worth noting because they mirror, almost exactly, the grounds for the President Proclamation on Midvaal, as contained in it accompanying schedule. Yet they resulted in no such similar investigation.

A full comparison between the terms of reference for the Midvaal SIU investigation, as set out in its accompanying schedule, and the points raised by the Auditor-General in his 2007/08 audit report on Emfuleni reveal that, if there is a basis to investigate Midvaal certainly there is a far stronger case to merit a similar investigation of Emfuleni.

SCHEDULE INFORMING MIDVAAL SIU INVESTIGATION:
(a) The improper, negligent or erroneous disposal of the Municipality’s operating assets as being redundant assets and (f) the failure to record the Municipality’s assets in its asset registers.BASIS FOR DISCLAIMER EMFULENI 2007/08 ANNUAL REPORT:Property, Plan and Equipment: The fixed asset register was not updated and was misstated due to the following:
• The asset register reflected property amounting to R1 030 000 that could not be traced to the valuation roll.
• The valuation roll reflected property amounting to R6 866 357 that could not be traced to the asset register.
• The asset register reflected property amounting to R4 152 180 that was sold previously.
• I was unable to perform a physical verification of the assets due to the incomplete asset register.

SCHEDULE INFORMING MIDVAAL SIU INVESTIGATION:
(b) the failure to properly implement the Municipality’s Indigent Policy.BASIS FOR DISCLAIMER EMFULENI 2007/08 ANNUAL REPORT:Non-indigent debtors and subsidies paid: During this reporting period subsidies amounting to R108 374 412 were paid to indigent consumers. As reported in the prior year certain consumers were classified as indigents while they did not meet the criteria for classification. The municipality initiated a process to confirm the classification of indigents however, the accounting records were not yet updated to correct the classification on indigents. Consequently, the subsidies paid to indigent debtors as disclosed in note 21 to the financial statements were overstated. The effect of this overstatement could not be quantified and I was unable to confirm the classification and accuracy in note 10 to the financial statements of consumers as indigents.

SCHEDULE INFORMING MIDVAAL SIU INVESTIGATION:
(d) the failure to obtain money belonging to the Municipality from the trust account of the Municipality’s attorneys and the failure to utilise such money for Municipal purposes.BASIS FOR DISCLAIMER EMFULENI 2007/08 ANNUAL REPORT:Investment property and rental income: The municipality could not provide a complete list of all investment properties. Therefore, I could not validate the completeness and valuation of investment property and rental income totalling R8 740 440 as included in the statement of financial performance.Sundry creditors: I did not obtain sufficient and appropriate audit evidence I considered necessary to satisfy myself as to the valuation, completeness, existence and rights and obligations of unknown income totaling R22 358 873 and various suspense account balances totaling R16 874 651 included as sundry creditors in note 3 to the financial statements.

SCHEDULE INFORMING MIDVAAL SIU INVESTIGATION:
(e) the failure to properly control the debt owned by the Municipality’s debtors.BASIS FOR DISCLAIMER EMFULENI 2007/08 ANNUAL REPORT:Investment property and rental income: The municipality could not provide a complete list of all investment properties. Therefore, I could not validate the completeness and valuation of investment property and rental income totalling R8 740 440 as included in the statement of financial performance.Sundry creditors: I did not obtain sufficient and appropriate audit evidence I considered necessary to satisfy myself as to the valuation, completeness, existence and rights and obligations of unknown income totaling R22 358 873 and various suspense account balances totaling R16 874 651 included as sundry creditors in note 3 to the financial statements.

SCHEDULE INFORMING MIDVAAL SIU INVESTIGATION:
2. The procurement of legal services by or on behalf of the Municipality and payments made in respect thereof in a manner that was- (a) not fair, competitive, transparent, equitable or cost-effective; and (b) contrary to applicable- (i) legislation; (ii) manuals, guidelines, practice notes or instructions issued by the National Treasury or the applicable Provincial Treasury; or (iii) manuals, policies, procedures, prescripts, instructions or practices of or applicable to the Municipality, and related irregular or fruitless and wasteful expenditure by the Municipality.BASIS FOR DISCLAIMER EMFULENI 2007/08 ANNUAL REPORT:Possible irregular expenditure: As required by section 36 of the Municipal Supply Chain Management Regulations a municipality is required to follow a competitive bid process when making procurements above R200 000. Management was not able to provide supporting documentation to verify compliance with Municipal Supply Chain Management Regulations for the procurement of expenditure to the value of R126 844 148. Furthermore, no disclosure was made in a note to the annual financial statements of these possible deviations.

The similarity is startling. And yet these were not untested allegations but material findings from a Chapter Nine institution. The only possible explanation as to why the Presidency did not initiate an SIU investigation into Emfuleni at the time can be that it was run by the ANC.

Emfuleni’s problems were not limited to poor financial management. In the run-up to the 2006 local government elections, the municipality was identified as one of 136 municipalities that needed to be ‘rescued’ by the national government and placed under the then-Department of Provincial and Local Government’s ‘Project Consolidate’.

That was a response not just to maladministration but corruption. In 2004 the Auditor-General confirmed that officials in the municipality had colluded with outside parties to sell off council assets at prices considerably less than market value. According to the report, one official scrapped a debt of R10 million in rates on those properties.[15] In March 2005, 41 officials were suspended for misconduct, including the Mayor and two his most senior executives. Of the 41 officials, 11 were disciplined and dismissed. Four – including a politician – were criminally charged.[16]

The municipality has also had a dire history of debt collection – another term of reference cited in the proclamation.

In November 2001, Emfuleni was owed R867m by its debtors.[17] By March 2003, this figure had increased to over R1 billion. At the time, the Mayor Johnny Thabane gave a startling indication of the municipality’s financial crisis: “We need R90 million every month for staff salaries and other operational functions, but we only collect about R60 million a month.”[18] By October 2005, Emfuleni was owed R1.7 billion by its debtors. By 2006, Emfuleni had the worst culture of non-payment of all municipalities in the country, with a debtor collection period of 489 days.[19]

The problem was not arrested. In October 2010, the municipality would make a plea to debtors to please pay up, acknowledging that outstanding debt now stood at R2 billion.[20] The next year, in April 2011 and just prior to the local government elections, Emfuleni Executive Mayor Mshudulu would again confirm during the State of the City Address that R2 billion was owed to Emfuleni by the public and businesses in the area.

In a 2010 speech Mayor Mshudulu explained the consequences of poor debt collection for the municipality: “The municipal debt is mounting and this has affected the ability of the municipality to effectively discharge its mandate of delivering services to its residents.” The final affect of which he put as follows: “The failure to pay will ultimately lead to the total collapse of our municipality.”[21] By comparison, Midvaal boasts 100% rates collection rate – the only municipality in the province to achieve this.

Even subsequent to the national government’s intervention the municipality continued to experience problems. In 2008, Emfuleni Mayor Dikeledi Tsotetsi was removed from her post by the ANC. It was alleged she had been “forced out” because she had been protecting Emfuleni municipal manager Manana Bakane-Tuoane who “had been wreaking havoc” since her appointment in 2006.[22]

Despite all these issues Emfuleni has never been subjected to a Presidential Proclamation. It record stands in stark contrast to Midvaal, both in terms of the municipality’s financial mismanagement and its long record of corruption and maladministration. The obvious question is, why not?

It is worth remembering too, that this case study focuses solely on Emfuleni – because it is the stand out point of comparison with Midvaal. But Mogale City, Merafong City and Randfontein have, likewise, poor financial records with the Auditor-General and the same question should rightfully be asked of them.

6. ONGOING INVESTIGATIONS

As part of any audit report on a public body the Auditor-General is required to state whether or not that body is currently under investigation. The following table sets out his statement with regards to each of those ANC-run local authorities in Gauteng for the 2010/11 financial year (i.e. as of 30 June 2011):

TABLE 7: Ongoing Investigations into ANC-run Gauteng Local Councils

It is immediately apparent that five of the six ANC-run local councils are currently the subject of investigation, the only exception being Lesedi. The problems range from procurement and supply chain management to fraud, financial misconduct and the improper awarding of contracts, to the irregular appointment of staff. The West Rand District, in particular, appears to have a cross-cutting investigation underway into a number of municipalities in the district. Significantly, Emfuleni, which as we have seen has a serious range of other problems, is included above them.

On the face of the allegations, they seem to constitute serious grounds for concern. Yet at no stage has the President issued a proclamation asking the Special Investigations Unit to also investigate. With regards to Midvaal, the President was happy to supplement the Public Protector’s investigation with one by the SIU. Again, the obvious question is why that standard was not applied to these other municipalities?

7. MIDVAAL: IN A LEAGUE OF ITS OWN

Midvaal’s track record in government is a long and distinguished one. On the available evidence, it is by some distance with best performing local municipality in Gauteng. That distinction is borne out by the facts and not merely that evidence produced from third party sources: the Gauteng Provincial government itself has undertaken research which not only identifies Midvaal the province’s best performer but provides a powerful point of comparison with the other local authorities in the province. In this way, Midvaal is a fundamental point of contention for the ANC because it demonstrates unequivocally that a different set of governing principles, values and policy, delivers better results.

7.1. The Quality of Life Survey

In 2009 the Gauteng City-Region Observatory (GCRO) was commissioned by the Gauteng Provincial Government to undertake a 6 643 respondent sample survey to measure the quality of life; socio-economic circumstances; satisfaction with service delivery; psycho-social attitudes; value-base; and other characteristics of residents in the Gauteng City-Region. The results of the survey were released at a joint press conference by the GCRO and Gauteng Premier’s Office, on 27 May 2010.[23]

That survey identified Midvaal as the outstanding performer.

TABLE 8: Quality of Life Survey – Citizen Satisfaction with Local Government

The DA in Midvaal has never claimed it is perfect. Service Delivery at local government level is by its nature a difficult business, particularly in South Africa, a society severely hampered by poverty and unemployment. So, Midvaal’s rating of 53% is an indication of what needs still to be done, rather than what has been achieved; nevertheless, it stands alone as the highest rating across the province and a world apart from municipalities such as Randfontein (29%), Mogale City (26%) and Westonaria (18%).

As part of the survey, GCRO generated its own index, to measure the quality of life in each Gauteng municipality, done by an amalgamated score of the various indicators in the survey – the higher the mean score, the better the quality of life. Again, Midvaal came out top:

TABLE 9: Quality of Life Survey – Quality of Life Index

Repeatedly and in numerous different categories, Midvaal trumps the other Gauteng municipalities. Of these other indicators, one is particular is of serious significance – unemployment.

TABLE 10: Quality of Life Survey – Rate of Unemployment

Again, Midvaal stands alone (26%), with an unemployment rate some 15% lower than Mogale City (41%) in second place and approximately 35% lower than Lesedi (57%), Westonaria (57%) and Emfuleni (59%).

During the 2011 election campaign, the ANC went out of its way to rubbish the survey (despite its own government having commissioned it). Chairperson of the ANC Sedibeng region, Simon Mofokeng, would claim, “such surveys are done in a skewed way, old ways and apartheid-style”.[24]

Ironically, Mofokeng also serves at the Executive Mayor of the Sedibeng District Municipality which, on 9 February 2011, just a few months before the election, had awarded Midvaal three 1st places, at the Professional Management Review-Africa (PMR-Africa) Sedibeng District Municipality Leaders and Achievers Awards, designed to compare the performance on municipalities in the district [25]:

• Joint 1st place: Doing the most to attract both foreign and local investment.
• Joint 1st place: Doing the most for job creation.
• 1st place: Doing the most to fight crime and generate social up-liftment.

7.2. Financially Sound and Productive

The release of two recent surveys conducted by independent private sector companies have also confirmed Midvaal as the premium municipality in Gauteng and, outside of the province, one of the top performing municipalities in the country.

• First, the Municipal Financial Sustainability Index (MFSI) released by Ratings Afrika was ranked the best municipality for financial stability in the province. Ratings Afrika defines financial sustainability as: “The financial ability to deliver services, develop and maintain the infrastructure required by its residents without unplanned increases in rates and taxes or a reduction in the level of services and the capacity to absorb financial shocks caused by natural, economic and other adversities without external financial assistance.” The ratings are based on a general analysis of the various municipalities’ financial statements and revolved around the following four criteria: [1] The financial position and the municipality’s ability to self-fund; [2] The operational performance – whether it makes a surplus or a deficit; [3] Its borrowing or liability management; and [4] Its liquidity, or how much cash in hand it has.[26]
• Second, the Municipal Productivity Index, released by Municipal IQ, ranked Midvaal fist in Gauteng and 6th out of 226 local municipalities across the country (significantly, the five municipalities above Midvaal were all DA-run councils). Midvaal improved its position from 13th place in the previous assessment. The index measures five factors, including: poverty levels and the municipal response to poverty; access to minimum levels of municipal services; economic intelligence and infrastructure used by residents to participate in the economy; financial governance and expenditure levels by a local council; and the vacancy rates in a municipality. These factors have a direct impact on the vibrancy of a local economy and indicate what assistance the municipality offers to residents and businesses.[27]

As with Midvaal’s nine consecutive financially unqualified audit reports, the Municipal Financial Sustainability Index and the Municipal Productivity Index suggest Midvaal runs its various programmes effectively and efficiently. Further, that the policies that underpin them are, by some distance, the best primary generators of growth and, with that, job creation. This is illustrated in practical terms by how well a municipality uses its Municipal Infrastructure Grant

Conditional Municipal Infrastructure Grants (MIGs) provide crucial funds for local governments to finance infrastructure development with a focus on the poor. These grants are one of three major categories of allocated resources from national government (the other two types of grants deal with capacity building and service delivery).

How municipalities spend their MIGs says a great deal about the attitude of those administrations. Critically, MIGs are grants designated specifically for the expansion of basic infrastructure to poor households, and to alleviate poverty. In fact, MIGs cannot be used for infrastructure that is used by communities that are not poor (municipalities are obliged to use capital funds for this type of infrastructure provision). Where MIGs are efficiently spent, an administration is demonstrating its commitment to providing infrastructure to its poorest residents.

In 2009/10 a total of 272 municipalities were assigned R8.739 billion in municipal infrastructure grants, of which only R6.575 billion or 75% was spent. In 12 of the 13 municipalities run by the DA at the time, including Midvaal, 100% of MIG allocations were spent. In contrast, only 34% of non-DA municipalities spent their full allotment. The national rate of MIG expenditure stood at 75% in 2009/10. Midvaal spent 96% of MIG for that year.

7.3. A Track Record of Service Delivery

Outside of the various independent surveys undertaken into service delivery in Midvaal, and using government’s own statistics, its track record is still excellent and, again, trumps the other Gauteng municipalities when it comes to service delivery.

Midvaal, again, outperformed the other local government authorities in the province. With regards to sanitation services in particular. The gap between Midvaal – with a percentage backlog of just 2% – and a municipality like Westonaria (32%) is substantial.

7.4. Delivering for All the People

Midvaal has made a concerted effort to uplift all communities within its borders. With a population of just under 90 000 and some 17% of all households in the municipality qualifying as indigent, the municipality has a special responsibility to help stimulate the local economy and, where it cannot elevate poverty, to ease the burden on those who circumstance prevents them from capitalising fully on opportunity.

Economic growth – and with it job creation – is not the sole responsibility of any local administration. It is heavily reliant on the broader financial environment established by provincial and, ultimately, the national government. There are, however, certain things it can do to make a direct difference.

TABLE 13: Indigent Threshold by Municipality

One of the primary such tools, is the municipality’s indigent policy, which currently assists just over 3 000 households. Essentially, by registering as indigent a resident receives from the municipality a rebate on basic services such as the provision of water and electricity. The fact that Midvaal is the only municipality in Gauteng with a revenue collection rate of 100% means it better equipped to cross subsidise the programme effectively. Such indigent policies are standard practice across all municipalities but the threshold – the income barrier – used to determine whether or not a person qualifies as indigent can be set at the discretion of the municipality. Obviously, the better run a municipality, the more efficient it is at collecting rates and spending its capital budget, the more it is able to dedicate to this end. If Midvaal’s new threshold is passed, it will be one of the highest among all municipalities not just in Gauteng but nationally. Obviously, the higher the threshold, the more people who are poor or destitute can qualify for a rebate.

In contrast, it is difficult to reconcile, for instance, Merafong’s threshold of R1 500 with its unemployment rate of 50%. A possible explanation is that municipality’s inability properly to collect and manage its rates more generally.

It is clear from the available evidence that Midvaal is the best-run local authority in Gauteng. Indeed, that it is one of the best run local authorities in the country. In every area, the DA government in Midvaal has outperformed those councils run by the ANC. In turn, in every area focused on in the SIU investigation – from its indigent policy, through debt collection, through its financial management and service delivery outcomes – Midvaal has excelled. The same thing, however, cannot be said of the majority of ANC-run councils in the province. And, in many instances, its performance is not just incomparable but in a state of advanced disarray. This fact is the source of extreme embarrassment for the ANC which, increasingly, is unable to justify its re-election on the grounds of its record in office.

It is against this background, the DA believes, that the SIU investigation was initiated. Its purpose is entirely political: an attempt to use state resources to discredit a DA government.

8. CONCLUSION

Based on the available evidence the following can be concluded:

• As the sole government outside the ANC’s control in Gauteng, Midvaal is has and remains a political target for the ANC. It has focused a great deal of political capital and its own resources on wrestling control of the municipality from the Democratic Alliance.
• With the advent of the 2014 national and provincial elections looming and with the ANC’s once tight grip on Gauteng weakening, it has redoubled its efforts to undermine Midvaal which, through its stellar track record, has served to show up the ANC’s poor governance in the province by setting a standard of excellence in almost every area that sets its apart from ANC-run councils.
• Unable to win control of Midvaal through fair and democratic elections, the ANC has resorted to using state apparatus to help achieve its end. In this way, President Jacob Zuma has authorised an all-encompassing, state-funded Special Investigations Unit investigation into almost every aspect of Midvaal administration over a period of ten years.
• The investigation was initiated only on the basis of untested allegations with no regard for the findings of either the Auditor-General, which can repeatedly found Midvaal’s financial management not only to be sound but one of the best in the province.
• The political motivation behind the investigation is, however, fully revealed when comparing the track records of other local government authorities in Gauteng, to Midvaal.
• Many other local Gauteng municipalities not only have financial track records far worse than that of Midvaal’s, indeed, in some cases, incomparably worse, but have been mired in corruption and maladministration on a serious and fundamental level, none of which has every warranted a Presidential Proclamation or an investigation of the magnitude mandated to the SIU.
• The most powerful example in this regard is Emfuleni which, for years, has had many of precisely the same concerns set out in the terms of reference that define the SIU investigation into Midvaal, identified specifically by the Auditor-General as areas of concern. Yet, it has never been investigated by the SIU.
• The Auditor-General has revealed that five out of six ANC-run local councils are currently part of one investigation or another into a range of issues, many of which mirror the allegations on which basis Midvaal was investigated. Yet, none of them have been subject to a Presidential Proclamation and investigation by the SIU.
• A fuller interrogation of the DA’s track record not only reveals that it delivers the best services in the province – according to citizens themselves – but that in almost every area, from financial sustainability, to productivity, to rates collections, to its ability to spend its infrastructure grants, Midvaal has outperformed the ANC-run councils in the area. It has done so across the board and delivered in turn a better standard of life to all its residents in all communities.
• In short, there is nothing to suggest Midvaal warrants an investigation of this nature. However, there is an overwhelming amount of evidence to suggest, over the course of the last ten years, any one of the six ANC-run local councils in Gauteng deserve intense interrogation, if not investigation for their failure to deliver on their mandate, to deliver basic services and, indeed, to properly manage and maintain the administrations under their control.
• This, however, has not happened.
• There can be little doubt the SIU investigation will be used to drive the same racially divisive agenda the ANC drove during the election campaign, in order that it might be able to establish the same narrative ahead of the 2014 national and provincial elections.

WHEREAS allegations as contemplated in section 2(2) of the Special Investigating Units and Special Tribunals Act, 1996 (Act No. 74 of 1996) (hereinafter referred to as the ‘Act”), have been made in respect of the affairs of the Midvaal Local Municipality that falls within the Gauteng Province (hereinafter referred to as the “Municipali’);
AND WHEREAS the Municipality suffered losses that may be recovered;
AND WHEREAS I deem it necessary that the said allegations should be investigated and justiciable civil disputes emanating from such investigation should be adjudicated upon;
NOW, THEREFORE, I hereby, under section 2(1) of the Act, refer the matters mentioned in the Schedule, in respect of the Municipality, for investigation to the Special Investigating Unit established by Proclamation No. R. 118 of 31 July 2001 and determine that, for the purposes of the investigation of the matters, the terms of reference of the Special Investigating Unit are to investigate as contemplated in the Act any alleged-
(a) serious maladministration in connection with the affairs of the Municipality;
(b) improper or unlawful conduct by councillors, officials, employees and/or agents of the Municipality;
(c) unlawful appropriation or expenditure of public money or property;
(d) unlawful, irregular or unapproved acquisitive act, transaction, measure or practice having a bearing upon State property;
(e) intentional or negligent loss of public money or damage to public property;
(f) offence referred to in Parts 1 to 4, or section 17, 20 or 21 (in so far as it relates to the aforementioned offences) of Chapter 2 of the Prevention and Combating of Corrupt Activities Act, 2004 (Act No. 12 of 2004), and which offences were committed in connection with the affairs of the Municipality; or
(g) unlawful or improper conduct by any person, which has caused or may cause serious harm to the interests of the public or any category thereof, which has taken place between 1 January 2002 and the date of publication of this Proclamation, or which took place prior to 1 January 2002 or after the date of publication of this Proclamation, and which is relevant, incidental or ancillary to, or connected with, the matters mentioned in the Schedule or which involve the same persons, entities or contracts investigated under authority of this Proclamation, and to exercise or perform all the functions and powers assigned to or conferred upon the said Special Investigating Unit by the Act, including the recovery of any losses suffered by the Municipality, in relation to the said matters in the Schedule.

Given under my Hand and the Seal of the Republic of South Africa at Pretoria this Seventeenth day of May Two thousand and eleven.

JG ZUMA
President

By Order of the President-in-Cabinet:

JT RADEBE
Minister of the Cabinet

SCHEDULE

Maladministration of the affairs of the Municipality by its councillors, officials, employees and/or agents in respect of the following:

(a) The improper, negligent or erroneous disposal of the Municipality’s operating assets as being redundant assets;
(b) the failure to properly implement the Municipality’s Indigent Policy;
(c) the erroneous issuing of town planning certificates;
(d) the failire to obtain money belonging to the Municipality from the trust account of the Municipality’s attorneys and the failure to utilise such money for Municipal purposes;
(e) the failure to properly control the debt owned by the Municipality’s debtors;
(f) the failure to record the Municipality’s assets in its asset registers; and
(g) the appointment of staff of the Municipality at incorrect post levels.

2. The procurement of legal services by or on behalf of the Municipality and payments made in respect thereof in a manner that was-

(a) not fair, competitive, transparent, equitable or cost-effective; and (b) contrary to applicable-
(i) legislation;
(ii) manuals, guidelines, practice notes or instructions issued by the National Treasury or the applicable Provincial Treasury; or
(iii) manuals, policies, procedures, prescripts, instructions or practices of or applicable to the Municipality, and related irregular or fruitless and wasteful expenditure by the Municipality.

ENDNOTES

[1] All resulted generated on the Independent Election Commissions website: http://www.elections.org.za/
[2] There are numerous examples of the ANC leadership stating that it is divinely sanctioned. On 4 May 2008, for example, in a speech delivered at an ANC rally in Khayelitsha, Cape Town, Jacob Zuma would tell supporters: “God expects us to rule this country because we are the only organisation which was blessed by pastors when it was formed. It is even blessed in Heaven. That is why we will rule until Jesus comes back. We should not allow anyone to govern our city (Cape Town) when we are ruling the country.”
[3] The Times; ANC Big Wigs in Midvaal; 3 April 2011
[4] Ibid
[5] The Citizen; Confident ANC wants Midvaal; 6 May 2011
[6] The Times; Fight for Midvaal intensifies; 13 May 2011
[7] The New Age; 1 000 new toilets for Midvaal; 13 May 2011
[8] DA Press Statement; Wilmot James MP; The ANC’s political attempt to use public office to discredit Midvaal; 13 May 2011
[9] City Press; ANC supporters threaten to burn shacks of DA voters in Midvaal; 19 May 2011
[10] Zoopy News; DA snatches Midvaal from the ANC; 19 May 2011
[11] See Public Protector Report number 15 of 2011/2012: ‘It can’t be right: Remedying self-interest in Midvaal’
[12] See DA Press Statement; Wilmot James MP; DA’s response to Public Protector’s report on Midvaal; 12 November 2011
[13] See the Auditor-General’s audit reports for Gauteng, as contained on the Auditor-General’s website (http://www.agsa.co.za/) and the Treasury’s website (http://mfma.treasury.gov.za/)
[14] See the document ‘Audit communication and report’, as contained on the Auditor-General’s website (http://www.agsa.co.za/LinkClick.aspx?fileticket=xQG07-j6oa4%3d&tabid=178&mid=708). The A-G provides the following full explanation for a Disclaimer of Opinion: “A disclaimer of opinion is expressed when the possible effect of a limitation on scope is so material and pervasive that the auditor has not been able to obtain sufficient appropriate audit evidence to form an opinion and accordingly is unable to express an opinion on the financial statements” and an Adverse Opinion: “An adverse opinion is expressed when the effect of a disagreement with management regarding departures from the financial reporting framework/basis of accounting is so material and pervasive to the financial statements that the auditor concludes that a qualification of the report is not adequate to disclose the misleading or incomplete nature of the financial statements.”
[15] City Press; Cleaning up the municipal mess; 3 April 2005
[16] Mail & Guardian; Mbeki visits troubled municipality; 17 October 2005
[17] Business Day; Council turns to SARS for help; 22 November 2001
[18] Sowetan; R1-bn debt too great for council; 27 March 2003
[19] See Rethinking Fiscal Decentralisation in South Africa; paper presented at the ESSA conference in Durban; 7-9 September 2005
[20] Sowetan; Debtors told to pay up; 4 October 2010
[21] See Key note address by the Executive Mayor of Emfuleni Local Municipality Cllr SA Mshudulu during the People’s Assembly; 20 November 2010
[22] Business Day; Emfuleni mayor ‘fired’; 26 May 2008
[23] The full survey is not available to the public but the key findings can be found on the GCRO website, in the form of a Power Point presentation. See http://www.gcro.ac.za/project/quality-life-survey The tables used in this document are generated from that presentation.
[24] The Times; ANC Big Wigs in Midvaal; 3 April 2011
[25] See Midvaal Press Statement; Midvaal wins awards for job creation, attracting investment & fighting crime; 9 February 2011
[26] See The Star; Bleak future in store for Joburg as index reveals it’s worst-performing council; 21 February 2012
[27] See Midvaal Website; Latest News; Midvaal moves into top 5; http://www.midvaal.gov.za/

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One Comment to “TARGET MIDVAAL: How the ANC is using the state to target its political opponent”

Your publication “TARGET MIDVAAL: How the ANC is using the state to target its political opponent ” refers

I must inform you with all respect that the four facts that you are reporting on, is based on incorrect information and false facts:

The real state of affairs is that the FF Plus and not the ANC was approached in 2008 by a number of rate payers of Midvaal who complained that they approached the Midvaal Municipality complaining that they were disadvantaged financially by certain DA officials forthcoming from a number of transactions of which I am in possession of all the particulars. There complaints did not receive proper attention.

We brought this under the attention of the DA leader and other top officials without real response or action.

The Freedomfront Plus and several whistleblowers asked the public protector during February 2009 to investigate maladministration in Midvaal and not the ANC.

President Zuma signed a proclamation to authorize the SIU to investigate 34 municipalities, amongst other Midvaal on 18 May 2011. This was published in the Government Gazette of 20 May 2011 on page 5.

The report of the public protector was only released on 10 November 2011 pointing out maladministration. The contents of the report speak for itself and could be found on the public protecor’s website.

The SIU is currently investigating corruption originating from the found maladministration.

Your Gauteng councillors should have informed you that numerous Gauteng municipalities are indeed in a “pre investigation” process after which a proclamation will most probably follow.

The FF Plus has always acted in a responsible manner by assisting to bring the DA into power in a coalition in Cape town in 2006 as well as in George.

I share your view that the ANC led Government has failed South Africa and that they should be replaced. The FF Plus will assist and support in this regard.

It is however incorrect to say that the Midvaal saga is a vendetta agains the DA controlled council of Midvaal.

Maladministration should be investigated and dealt with regardless of who is in power.

Would you be so kind as to rectify this publication as soon as possible, as the contents thereoff is false.